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USDJPY Market Update

8/29/2022 12:26 PM

The US dollar is actively adding in value during morning trading, testing the level of 138.80 for a breakout. The USD/JPY pair is approaching its previous record highs, updated in mid-July, while the US currency received a new impetus, reacting to the comments of US Federal Reserve Chairman Jerome Powell on the need to maintain a "hawkish" monetary policy. The official is convinced that raising interest rates will help bring record inflation under control, even if it means sacrificing economic growth.

In turn, macroeconomic statistics from the US, published on Friday, put some pressure on the dollar. In particular, the Personal Income in July slowed down from 0.7% to 0.2%, which turned out to be noticeably worse than market expectations at the level of 0.6%, and Personal Spending decreased from 1.0% to 0.1%, with the forecast at 0.4%.

Additional pressure on the position of the yen today is exerted by statistics from Japan: the Coincident Index in June fell from 99.0 points to 98.6 points, and the Leading Economic Index for the same period fell from 101.2 points to 100.9 points, while forecasts assumed a fall to 100.6 points.

Bollinger Bands in D1 chart show active growth. The price range expands, freeing a path to new local highs for the "bulls". MACD indicator is growing, while preserving a rather stable buy signal (located above the signal line). Stochastic reversed towards growth again after an attempted corrective decline last week. The indicator is approaching its highs once again, indicating the risks of overbought USD in the ultra-short term.

Resistance levels: 139.50, 140.50, 141.50, 142.50. | Support levels: 138.50, 137.50, 136.50, 135.57.

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